In the recent case of Jensen v. Whitlow, 334 Or 412, 51 P3d 599 (2002), this
court rejected a facial challenge to ORS 30.265(1) under Article I, section 10, id. at 421,
but declined to decide an "as-applied" challenge, id. at 415-16. We now address such an
"as-applied" challenge and hold that the application of ORS 30.265(1) and ORS
30.270(1) in this case violates Article I, section 10.

Plaintiff Jordaan Clarke was born in February 1998 at Oregon Health
and Science University (OHSU) with a congenital heart defect. He was admitted to OHSU
in May 1998 for the surgical repair of that condition. Following surgery, plaintiff was
placed in a surgical intensive care unit. While in that unit, plaintiff suffered prolonged
oxygen deprivation causing him permanent brain damage.

Plaintiff's brain damage was a direct result of the negligence of OHSU and
certain of its employees and agents. Plaintiff is totally and permanently disabled. His
expenses for total life and health care will amount to $11,073,506, the loss of his future
earning capacity is $1,200,000, and his noneconomic damages are $5,000,000.

In 2001, plaintiff brought this action against OHSU and against the
individuals who treated him. (2) Pursuant to ORS 30.265(1), defendants moved to
substitute OHSU as the sole defendant in the action. The trial court granted the motion,
and plaintiff filed a second amended complaint naming only OHSU as defendant. In its
answer, OHSU admitted that it was negligent in one or more of the ways alleged by
plaintiff and that its negligence resulted in permanent injury to plaintiff. OHSU also
admitted that "plaintiff sustained economic and noneconomic damages in excess of the
monetary limitations of the Oregon Tort Claims Act as a result of the injuries caused by
the negligence of OHSU."

OHSU moved for judgment on the pleadings pursuant to ORCP 21 B,
contending that the trial court should enter judgment in favor of plaintiff and against
OHSU in the amount of $200,000, OHSU's maximum liability under ORS 30.270(1).
The trial court granted OHSU's motion and entered judgment against OHSU in the
amount of $200,000.

As noted earlier, the primary issue in this case is whether ORS 30.265(1)
and ORS 30.270(1), as applied to facts of this case, violate Article I, section 10. We
begin with an overview of the OTCA, then turn to an overview of Article I, section 10,
and then analyze the issue at hand.

A. Overview of the OTCA

Before 1967, public bodies were immune from tort liability. Smith v.
Pernoll, 291 Or 67, 69, 628 P2d 729 (1981). A person injured by the negligence of a
public employee acting within the scope of his or her employment could pursue an action
against the employee, but not against the public employer. See Krieger v. Just, 319 Or
328, 331-32, 876 P2d 754 (1994) (citing Ogle v. Billick, 253 Or 92, 453 P2d 677 (1969)).
In 1967, the legislature enacted the OTCA, which partially waived immunity for public
bodies. Jensen, 334 Or at 416-17. The 1967 version of the OTCA included a monetary
limitation on the state's liability, Or Laws 1967, ch 627, § 4, but did not alter the liability
of public officers, employees, or agents. Jensen, 334 Or at 417. Those individuals,
therefore, remained personally liable for torts committed within the course and scope of
their employment. Id.

In 1975, the legislature amended the OTCA. The 1975 version required
that public bodies indemnify officers, employees, and agents against tort claims "arising
out of an alleged act or omission occurring in the performance of duty." Jensen, 334 Or
at 417 (internal quotation marks and citations omitted); Or Laws 1975, ch 609, § 16(1).
Additionally, the legislature extended the limitation on damages to claims against
officers, employees, and agents of all public bodies. Jensen, 334 Or at 417; Or Laws
1975, ch 609, § 13.

In 1991, the legislature again revised the OTCA. Or Laws 1991, ch 861, §
1. That revision added language to ORS 30.265(1) that eliminated entirely any claim
against any officer, employee, or agent for their work-related torts. Jensen, 334 Or at
417. Pursuant to the 1991 amendments, the sole cause of action available for torts
committed by public officers, employees, or agents is an action against the public body.
Or Laws 1991, ch 861, § 1. After that amendment, ORS 30.265(1) now requires that, if an
action is filed against a public officer, employee, or agent, the public body "shall be
substituted as the only defendant." That substituted claim against the public body is
subject to the OTCA's damages limitations. ORS 30.265(1); ORS 30.270(1); Jensen, 334
Or at 417. The 1991 amendments were added at the request of the state, which asserted
three reasons for the requested change. Testimony, House Judiciary Committee, HB
3520, May 13, 1991, Ex E (statement of Jack Landau, Deputy Attorney General). First,
because the law provided indemnification for state officers, naming the officers as parties
"serve[d] no purpose." Id. Second, some claimants had argued that the limitation on the
liability of the state did not apply to the liability of individuals; therefore, the state sought
to "plug that loophole." Id. Finally, the state noted that "a lot of resources were spent"
litigating which state officials are properly named in any given lawsuit. Id. Here, as in
Jensen, the 1991 revision frames the issues in this case.

B.Overview of Article I, section 10

We begin our overview by again quoting the text of Article I, section 10:

"No court shall be secret, but justice shall be administered, openly
and without purchase, completely and without delay, and every man shall
have remedy by due course of law for injury done him in his person,
property, or reputation."

(Emphasis added.) In Priest v. Pearce, 314 Or 411, 415-16, 840 P2d 65 (1992), this court
set forth a methodology for interpreting provisions of the Oregon Constitution. That
methodology requires an examination of the text of the provision, the history of the
provision, and the case law concerning the provision. Id. This court applied that
methodology to the second clause of Article I, section 10, in Smothers v. Gresham Transfer, Inc., 332 Or 83, 23 P3d 333 (2001).

In Smothers, the court first examined the text of Article I, section 10.
Smothers, 332 Or at 91-94. The court noted that the second clause of Article I, section
10, by using the word "shall," affirmatively mandated that a remedy by due course of law
be available in the event of injury to rights respecting person, property, and reputation.
Id. at 91. The court also noted that contemporaneous dictionaries indicated that "remedy"
referred "both to a process through which a person may seek redress for injury and to
what is required to restore a person who has been injured." Id. at 92. However, the court
concluded that "no definitive picture of the scope or effect of the remedy clause emerges"
from examining only the text of the clause. Id. at 94.

The court then turned to the historical circumstances of the provision. Id.
The Remedy Clause, the court explained, can be traced to Edward Coke's commentary on
the second sentence of Chapter 29 of the Magna Carta of 1225. Id. The translation of
Chapter 29 provides:

"No freeman shall be taken, or imprisoned, or be disseised of his freehold,
or liberties, or free customs, or be outlawed, or exiled, or any otherwise
destroyed; nor will we not pass upon him, nor condemn him, but by lawful
judgment of his peers, or by the law of the land. We will sell to no man, we
will not deny or defer to any man either justice or right."

Id. at 95 (quoting Edward Coke, The Second Part of the Institutes of the Laws of England,
45 (1797)) (internal quotation marks omitted). According to Coke's commentary on that
chapter, the second sentence evolved to a guarantee that every subject had a remedy by
the course of law for injury to goods, land, or person. Smothers, 332 Or at 96-97. That
guarantee made its way to the American colonies through, among other things, Coke's
commentary on the English common law. Id. at 103-04. The court summarized the
results of its historical inquiry:

"In sum, when the Oregon Constitutional Convention convened in
1857, courts and commentators had provided considerable insight into the
background and meaning of remedy clauses in state declarations or bills of
rights. Those cases and commentaries revealed that the purpose of remedy
clauses was to protect 'absolute' common-law rights. For injuries to those
rights, the remedial side of the common law had provided causes of action
that were intended to restore right or justice. Remedy clauses mandated the
continued availability of remedy for injury to absolute rights."

Id. at 112.

Finally, the court examined the case law surrounding Article I, section 10.
Id. at 115-124. Early cases, Smothers explained, held that "the purpose of the remedy
clause is to save from legislative abolishment those jural rights which had become well
established prior to the enactment of our Constitution." Id. at 116 (internal quotation
marks and citation omitted). This court's jurisprudence changed course, however,
following a United State Supreme Court decision that upheld a guest passenger statute
facing an Equal Protection Clause challenge. Id. at 116-17 (discussing Silver v. Silver,
280 US 117, 50 S Ct 57, 74 L Ed 221 (1929)). Thereafter, this court relied on Silver to
hold that the Remedy Clause does not prohibit the legislature from abolishing common-law rights that existed when the Oregon Constitution was drafted. Smothers, 332 Or at
117 (discussing Perozzi v. Ganiere, 149 Or 330, 345, 40 P2d 1009 (1935)). This court
followed Silver and Perozzi in subsequent decisions. Smothers, 332 Or at 117-19. In
Smothers, however, this court disavowed the line of cases beginning with Perozzi. It do
so because of Perozzi's erroneous reliance on Silver's interpretation of the Equal
Protection Clause in deciding a Remedy Clause claim, to the extent that those cases held
that the legislature could abolish absolute rights respecting person, property, or reputation
without violating the Remedy Clause. Id. at 118-19.

"[the Remedy Clause] was intended to preserve the common-law right of
action for injury to person or property, and while the legislature may change
the remedy or the form of procedure, attach conditions precedent to its
exercise, and perhaps abolish old and substitute new remedies, * * * it
cannot deny a remedy entirely."

(internal citations omitted), and Batdorff v. Oregon City, 53 Or 402, 408-09, 100 P 937
(1909), which held unconstitutional a city ordinance that took away a remedy from those
injured by negligent failure to maintain the city streets. Smothers also looked to an early
federal court opinion written by Judge Matthew Deady, who had been president of the
Oregon Constitutional Convention in 1857, that explained the meaning of the Remedy
Clause as follows:

"[T]he remedy guarantied by [Article I, section 10] is not intended for the
redress of any novel, indefinite, or remote injury that was not then regarded
as within the pale of legal redress. But whatever injury the law, as it then
stood, took cognizance of and furnished a remedy for, every man shall
continue to have a remedy for by due course of law. * * * If [a] then known
and accustomed remedy can be taken away in the face of this constitutional
provision, what other may not? Can the legislature, in some spasm of novel
opinion, take away every man's remedy for slander, assault and battery, or
the recovery of a debt?"

Eastman v. County of Clackamas, 32 F 24, 32 (D Or 1887). Based on those, and other
early cases, Smothers concluded that (1) the Remedy Clause mandates that remedy by due
course of law shall be available to every person in the event of injury; (2) "remedy"
includes both the remedial process as well as what is required to restore a right that has
been injured; and (3) "injury" is a wrong or harm for which a cause of action existed
when the drafters wrote the Oregon Constitution in 1857. Smothers, 332 Or at 124.

After reviewing the text, history, and case law as outlined above, the court
in Smothers set forth the following analysis to be applied to Remedy Clause claims:

"[T]he first question is whether the plaintiff has alleged an injury to one of
the absolute rights that Article I, section 10 protects. Stated differently,
when the drafters wrote the Oregon Constitution in 1857, did the common
law of Oregon recognize a cause of action for the alleged injury? If the
answer to that question is yes, and if the legislature has abolished the
common-law cause of action for injury to rights that are protected by the
remedy clause, then the second question is whether it has provided a
constitutionally adequate substitute remedy for the common-law cause of
action for that injury."

Id. at 124. We now apply the Smothers analysis to plaintiff's arguments under Article I,
section 10.

C. Plaintiff's claim against OHSU

Under Smothers, the first issue we must address is whether the common law
would have recognized plaintiff's negligence claim against OHSU. OHSU contends that
plaintiff would not have had a claim against it, because OHSU would have been entitled
to sovereign immunity under the common law of Oregon. If OHSU would have been
entitled to sovereign immunity at common law, then the OTCA's limitation of a claim
against OHSU would not violate Article I, section 10, because the common law would not
have recognized a cause of action against OHSU for the injury alleged. See Hale v. Port
of Portland, 308 Or 508, 518, 783 P2d 506 (1989) (holding that a statute that abolishes or
limits a claim against a public entity does not violate Article I, section 10). We conclude
that OHSU would have been entitled to sovereign immunity at common law because,
among other reasons, OHSU is a state-created entity that performs functions traditionally
performed by the state.

As previously noted, the Court of Appeals concluded that OHSU would
have been immune from liability at common law and therefore rejected plaintiff's Article
I, section 10, argument regarding OHSU. Clarke, 206 Or App at 622. The court
reasoned that "a plaintiff's remedies against a public body created by the state to perform
functions on behalf of the state would have been understood by the drafters [of the
Oregon Constitution] to have been entirely dependent on the will of the legislature." Id.
at 618. The Court of Appeals concluded that OHSU was such a public body because,
according to the text of the statute creating it, OHSU is a state-created public corporation,
which performs governmental functions. Id. at 621-22. The court therefore held that,
because plaintiff would have had no absolute right to a common-law action against
OHSU, plaintiff's claim against OHSU was not protected by Article I, section 10. Id. at
622. We now address plaintiff's challenge to that conclusion.

"Our Constitution is framed on the premise that the state is immune from
suit * * *." Vendrell v. School District No. 26C et al, 226 Or 263, 278, 360 P2d 282
(1961). That premise is embodied in Article IV, section 24, of the Oregon Constitution,
which provides in relevant part, "Provision may be made by general law, for bringing suit
against the State, as to all liabilities originating after, or existing at the time of the
adoption of this Constitution[.]" Because the doctrine of sovereign immunity is implicit
in the Constitution, this court may not abolish the doctrine; instead, the doctrine may only
be waived or altered by the legislature pursuant to a general law. Vendrell, 226 Or at 278-79. Although the doctrine is constitutionally protected, this court interprets the doctrine
of sovereign immunity "within the narrowest possible bounds consistent with the
constitutional provision." State v. Shinkle, 231 Or 528, 539, 373 P2d 674 (1962). With
those principles in mind, we now analyze whether OHSU would have enjoyed sovereign
immunity at common law.

Our previous cases provide some guidance as to what constitutes an
instrumentality of the state. In Hale, this court concluded that the Port of Portland was an
instrumentality of the state entitled to immunity from civil liability. Hale, 308 Or at 517-518. The court noted that the Port was created by the legislature to "have full control of
[the Willamette and Columbia Rivers] at [Portland, East Portland and Albina], and
between said cities and the sea, so far and to the full extent that this State can grant the
same." Id. at 517 (internal quotation marks and citation omitted). Although the Port's
functions had expanded since its creation to include serving the greater Pacific Northwest,
the court concluded that the Port remained an instrumentality of the state because the Port
continued to promote the shipping and maritime interests of the Portland area. Id. at 518.

This court also has used the term "instrument[s] * * * of the state" in a case
which determined that the State Board of Higher Education enjoyed sovereign immunity.
James & Yost, 216 Or at 600-01. Noting that the State Board of Education was "not a
separate and distinct entity" from the state, the court also described it as "an instrument or
arm of the state, charged with carrying out one of the functions of government, to-wit, the
education of the peoples of the state." Id. at 600 (emphasis added). The court explained
that the State Board of Higher Education had only those powers and duties as outlined by
the legislature. Id. at 600-01. The court concluded that "[t]here can be little question but
that the action is one against the state." Id. at 600.

This court has also illuminated the concept of an instrument of state
government in the context of a challenge to the creation of public corporations under
Article XI, section 2, of the Oregon Constitution, which provides that "[c]orporations may
be formed under general laws, but shall not be created by the Legislative Assembly by
special laws." In State ex rel Eckles v. Woolley, 302 Or 37, 726 P2d 918 (1986), the court
evaluated whether the legislature's creation of the State Accident Insurance Fund
Corporation violated Article XI, section 2. The court explained that Article XI, section 2,

"allows the creation of a corporation for a public purpose, 'whose members
are citizens, not stockholders; an instrument of the government with certain
delegated powers, subject to the control of the legislature, and its members
officers or agents of the government for the administration or discharge of
public duties.'"

From those cases, we glean certain attributes generally possessed by
instrumentalities of the state. An instrumentality of the state performs a function
traditionally performed by the state. Additionally, the state generally outlines the powers
and duties of its instrumentalities, either via statutory enactment or some other method.
An instrumentality of the state is subject, at least in part, to the control of the state in
some way.

We now examine whether OHSU is an instrumentality of the state and
would have, therefore, been immune at common law. Plaintiff concedes that, prior to
1995, OHSU was an instrumentality of the state, but asserts that since 1995, when the
legislature recreated OHSU as a public corporation, OHSU no longer is an instrumentality
of the state. On the limited record before us in this proceeding we disagree with
plaintiff's contention.

Prior to 1995, OHSU was part of the Oregon State System of Higher
Education. Since 1995, OHSU has been a "public corporation" under ORS 353.020; that
term is defined as

"an entity that is created by the state to carry out public missions and
services. In order to carry out these public missions and services, a public
corporation participates in activities or provides services that are also
provided by private enterprise. A public corporation is granted increased
operating flexibility in order to best ensure its success, while retaining
principles of public accountability and fundamental public policy. The
board of directors of a public corporation is appointed by the Governor and
confirmed by the Senate but is otherwise delegated the authority to set
policy and manage the operations of the public corporation."

ORS 353.010(2). The legislature also decreed that OHSU "shall be a governmental entity
performing governmental functions and exercising governmental powers" and "shall be
an independent public corporation with statewide purposes and missions." ORS 353.020.
Thus, the statute explicitly states that OHSU shares the first attribute of an instrumentality
of the state -- performing functions or providing services that the government has
traditionally performed or provided.

In those statutes, the legislature specified some of OHSU's public services
and functions, in describing the missions and purposes of OHSU. Specifically:

"(1) It shall be the public policy of the Oregon Health and Science
University in carrying out its missions as a public corporation:

"(a) To serve the people of the State of Oregon by providing
education in health, science, engineering and their management for students
of the state and region.

"* * * * *

"(3) The university is designated to carry out the following public
purposes and missions on behalf of the State of Oregon:

"(a) Provide high quality educational programs appropriate for a
health and science university;

"(b) Conduct research in health care, engineering, biomedical
sciences and general sciences;

"(c) Engage in the provision of inpatient and outpatient clinical care
and health care delivery systems throughout the state;

"(d) Provide outreach programs in education, research and health
care;

"(e) Serve as a local, regional and statewide resource for health care
providers; and

"(f) Continue a commitment to provide health care to the
underserved patient population of Oregon.

"(4) The university shall carry out the public purposes and missions
of this section in the manner that, in the determination of the Oregon Health
and Science University Board of Directors, best promotes the public
welfare of the people of the State of Oregon."

ORS 353.030. OHSU's purposes, therefore, include "promot[ing] the public welfare of
the people of the State of Oregon[,]" in part through providing education and health care
to the people of the State. ORS 353.030(4). Without question, the particular combination
of education and health care in the form of a research and teaching hospital is
traditionally a function performed by the state, at least for the last century. See, e.g.,
James & Yost, 216 Or at 600 (one of the functions of the state government is "the
education of the peoples of the state"). OHSU's functions, as outlined by statute,
demonstrate that it possesses the first attribute of an instrumentality of the state.

OHSU also possesses the second attribute of an instrumentality of the state.
In James & Yost, this court described an instrument of the state as possessing those
powers "as the state entrusts to [it]." Id. at 600. In ORS 353.050, the legislature outlined
more than 20 "[p]owers and duties of board and university officials," including setting
policies for the university, entering into contracts, including partnerships and joint
ventures, entering into real estate transactions, suing and being sued in its own name,
investing funds, borrowing funds, and developing academic programs. The legislature
also granted to the board or OHSU the power to "[p]erform any other acts that in the
judgment of the board or university are requisite, necessary or appropriate in
accomplishing the purposes described in or carrying out the powers granted by this
chapter." ORS 353.050(25). This list of powers outlined by the legislature, though
broad, suggests that OHSU is an instrumentality of the state.

The governance structure of OHSU also is an important indicator that
OHSU is an instrumentality of the state. OHSU's board of directors consists of 10
members who, except for OHSU's president, are appointed by the Governor and
confirmed by the Senate. ORS 353.040(1). Except for OHSU's president and a student
member of the board of directors, each member serves a four-year term. ORS
353.040(2). The Governor has the authority to remove any board member for cause, after
notice and public hearing. ORS 353.040(7). The board is charged with "exercis[ing] all
the powers of the Oregon Health and Sciences University" and "govern[ing] the
university." ORS 353.050. In carrying out those powers, "the university shall be a
governmental entity performing governmental functions and exercising governmental
powers." Id.

Having concluded that the common law in Oregon in 1857 would not have
recognized a cause of action for negligence against OHSU, we now address whether the
OTCA's elimination of a cause of action against the individual defendants, combined with
its damages limitation, survives scrutiny under Article I, section 10. As we noted earlier,
the Oregon Constitution guarantees that "every man shall have remedy by due course of
law for injury done him in his person, property, or reputation." Or Const, Art I, § 10.

From the foregoing, the state contends that the court should review a
legislatively substituted remedy on a categorical basis only. Put another way, the state
suggests that the determination of whether a substitute remedy is adequate should not
focus on the facts of an individual case, but instead should focus on the balance struck by
the legislature in creating a substitute remedy. The state asserts that, unless a category of
potential plaintiffs is left without a remedy, the legislative policy choice is conclusive.On the other hand, plaintiff contends that the Remedy Clause protects both
the procedure for seeking redress as well as the substance of that redress. Plaintiff argues
further that, when the legislature abolishes a common-law remedy, it must provide a
remedy that is "substantially equivalent" to the common-law remedy.

This court has addressed Article I, section 10, challenges to the OTCA on
three prior occasions. In Hale, this court rejected an Article I, section 10, challenge to the
OTCA as applied to an action brought against the City of Portland (City) and the Port of
Portland (Port). Hale, 308 Or at 517-24. The plaintiff in that case suffered injuries
stemming from an alleged failure of the City and the Port to maintain a road. Id. at 511.
The plaintiff's medical expenses totaled more than $600,000; however, upon motion by
the City and Port, the trial court struck the plaintiff's claim for damages in excess of the
$100,000 damages limitation in effect at the time and entered judgment against the City
and the Port for $100,000. Id. On review, the plaintiff challenged the constitutionality of
that damages limitation. Id.

The court in Hale first concluded that the Port would have been immune
from liability at common law; therefore, the damages limitation did not "deny plaintiff
any right he ha[d] against the Port by virtue of the guarantee in Oregon Constitution
Article I, section 10, because there never was such a right." Id. at 518. The court reached
a different conclusion regarding the City, and therefore went on to analyze the damages
limitation as to the plaintiff's claim against the City. Id. at 521-24. The court explained
that Article I, section 10, permits the legislature to alter a common-law remedy, "so long
as the party injured is not left entirely without a remedy. * * * [T]he remedy need not be
precisely of the same type or extent; it is enough that the remedy is a substantial one." Id.
at 523 (emphasis added). In upholding the OTCA's damages limitation, Hale emphasized
that the legislature had struck a new balance between municipal corporations and
potential plaintiffs. Id. The court concluded that the remedy available to plaintiff was
"substantial" because, although the OTCA reduced the size of the potential recovery, it
also expanded the class of plaintiffs that could recover by not requiring a plaintiff to
demonstrate that the municipal corporation was engaged in a proprietary activity when it
injured that plaintiff. Id. The court described that quid pro quo as follows:

"A benefit has been conferred, but a counterbalancing burden has been
imposed. This may work to the disadvantage of some, while it will work to
the advantage of others. But all who had a remedy continue to have one.
This may not be what plaintiff wants. It may not even be what this court, if
it were in the business of making substantive law on this subject, would
choose to enact. But it is within the legislature's authority to enact in spite
of the limitations of the Oregon Constitution, Article I, section 10."

Id. at 523. Justice Linde concurred separately, asserting that "the court has allowed
legislative immunization of cities from tort liability only on condition that the individuals
who are personally responsible for harm qualifying as a legal injury remain liable." Id. at
530. Because Hale included no claim against individual public officers, Justice Linde
agreed with the court's conclusion. Id.

Most recently, in Jensen, 334 Or at 417-21, this court addressed whether
ORS 30.265(1), on its face, violated Article I, section 10. Jensen was a case involving
certified questions from the United States District Court for the District of Oregon. Id. at
415. The plaintiff in that case alleged that a foster parent abused her daughter while she
was in the custody of the Children Services Division of the State of Oregon (CSD). Id. at
416. The plaintiff alleged that individual agents and employees of CSD were negligent.
Id. The individual defendants moved to strike and dismiss the claims against them and to
substitute the state as the sole defendant pursuant to ORS 30.265(1). Id. While that
motion was pending, the plaintiff moved the district court to certify questions to this court
as to the constitutionality of ORS 30.265(1). Id. This court declined to consider any of
the certified questions presented as "as-applied" challenges to ORS 30.265(1); instead,
the court considered only facial challenges to that statute. Id. at 415-16. Addressing the
facial challenge under Article I, section 10, this court applied the two-step analysis
governing Article I, section 10, claims set forth in Smothers, 332 Or at 124:

"[O]ur first step is to determine whether the injury that plaintiff has alleged
is one for which the remedy clause guarantees a remedy. If we answer that
question affirmatively, and if the legislature has abolished that common-law
claim, then our second step is to determine whether the legislature has
provided a constitutionally adequate substitute remedy for that abolished
common-law claim."

Jensen, 334 Or at 418 (internal citation omitted). The court assumed, without deciding,
that the injury alleged was one for which Article I, section 10, guarantees a remedy. Id.
The court then analyzed whether ORS 30.265(1), which required the plaintiff to bring an
action against the public body alone, provided a constitutionally adequate substitute
remedy. Id. at 418-21. The court concluded that the OTCA was capable of constitutional
application. Id. at 421. The court reasoned:

"Because the damages 'cap' is not implicated in every case, and because a
damages award has yet to be determined in this case, the damages 'cap' does
not render the remedy available to plaintiff 'incapable of restoring the right
that has been injured.'"

Id. at 421 (quoting Smothers, 332 Or at 119-20). This court therefore held that ORS
30.265(1) does not, on its face, violate Article I, section 10. Jensen, 334 Or at 421.

In sum, this court consistently has held that Article I, section 10, is not
merely an aspirational statement, but was intended by the framers of the Oregon
Constitution to preserve for future generations, against legislative or other encroachment,
the right to obtain a remedy for injury to interests in person, property, and reputation
under circumstances in which Oregon law provided a remedy for those injuries when
Oregon ratified its constitution. See, e.g., Smothers, 332 Or at 124 ("At a minimum, to
be remedy by due course of law, the statutory remedy must be available for the same
wrongs or harms for which the common-law cause of action existed in 1857.").
However, as our review of the cases demonstrates, Article I, section 10, does not
eliminate the power of the legislature to vary and modify both the form and the measure
of recovery for an injury, as long as it does not leave the injured party with an
"emasculated" version of the remedy that was available at common law.

Smothers represents a more recent effort by this court to identify the
substance of the remedy guarantee in the context of a personal injury incurred by a
plaintiff while working for a private employer. This court, citing earlier cases,
acknowledged the legislature's reservoir of lawmaking authority to adjust remedial
processes and substantive remedies to satisfy the constitutional command to provide
"remedy by due course of law for injury * * *." Smothers, 332 Or at 119. However, in
focusing on that authority, this court stated that any alteration may not substitute an
"emasculated" version of the remedy that was available at common law. Id. at 119-20.

Our assessment of the "injury done [plaintiff] in his person" is relatively
simple in the context of this case. Plaintiff alleges, and defendants admit for purposes of
this proceeding, that, due to the personal injury suffered here as a consequence of
defendants' negligence, plaintiff has suffered economic damages in the sum of $11,073,
506, for anticipated life and health care expenses, and $1,200,000 for lost future earning
capacity, for total economic damages of $12,273,506. Plaintiff also alleges, and
defendants admit, that plaintiff has suffered noneconomic damages in the sum of
$5,000,000. There is no dispute that, when Oregon adopted its remedy guarantee,
plaintiff would have been entitled to seek and, if successful, to recover both types of
damages from the individual defendants.

The individual defendants attempt to justify the complete statutory
elimination of their liability by contending that the damage awards against a public body
that ORS 30.270(1) allows constitute an adequate "remedy by due course of law." In so
arguing, they rely on this court's opinion in Hale, however, as our discussion above
indicates, Hale is distinguishable. Hale examined the adequacy of a statutorily capped
monetary remedy in a claim against public bodies. Hale, 308 Or at 511-12, 521-24. In
that case, with respect to the municipal defendant that did not enjoy sovereign immunity,
the court's analysis did not address the injured plaintiff's traditional right to seek full
relief from an individual tortfeasor. Id. at 521-24. The statutory scheme at issue here, in
contrast, eliminates any claim against an individual tortfeasor. Hale does not assist the
defendants in this case.

Neither does Greist support the individual defendants. As explained above,
the statutory damage limitation at issue in Greist allowed recovery of 100 percent of any
economic damages and up to $500,000 in noneconomic damages. Greist, 322 Or at 291.
Placing no limit on recovery of economic damages allowed plaintiffs to recover fully their
out-of-pocket losses, including expenses for medical, burial, and memorial services. Id.
The court also explained that the wrongful death claim, at issue in that case, "came into
existence with a limitation" and that, historically, recovery for wrongful death had been
low. Id.Considered in that context, the court concluded that the legislative choice did
not violate Article I, section 10. Id. In contrast, the legislation under review here does
not merely adjust the recovery for a legislatively created remedial scheme; instead, it
eliminates a common-law remedy against an individual tortfeasor.

We view plaintiff's economic damages of over $12 million as
representative of the enormous cost of lifetime medical care currently associated with
permanent and severe personal injuries caused by the medical negligence of a state
officer, agent, or employee. Defendants do not argue that those damages do not
constitute an "injury" within the meaning of the constitution. Nor does anything in the
legislation suggest such a conclusion by the legislature. Yet, the legislature has
completely eliminated an injured person's preexisting right to obtain a full recovery for
those damages from the individual tortfeasors who negligently caused the injuries.

The decision of the Court of Appeals is affirmed. The judgment of the
circuit court is reversed and the case is remanded to the circuit court for further
proceedings.

BALMER, J., concurring.

Plaintiff was injured by the medical negligence of employees of Oregon
Health and Science University (OHSU). Plaintiff suffered damages (which OHSU, for
present purposes, does not dispute) of at least $11 million, primarily for the cost of his
past and future medical care. Oregon's current statutes limit plaintiff's recovery to
$100,000 for economic damages (medical costs, lost wages, and similar losses) and
another $100,000 for noneconomic damages, such as pain and suffering. I agree with the
majority's analysis and with its conclusion that the statutes that lead to that result deprive
plaintiff of a remedy that he had at common law without providing an adequate substitute
remedy, in violation of the "Remedy Clause" of Article I, section 10, of the Oregon
Constitution.

I write separately to make two points. First, the limit on the remedy
available to plaintiff here should have been increased long ago by the legislature -- and
the legislature should take this opportunity to reconsider the appropriate tort claims act
limits for medical malpractice claims against OHSU. Second, the majority correctly
states that the Remedy Clause does not prevent the legislature from modifying the form or
amount of recovery -- or even from eliminating -- common-law claims, as long as it
provides an adequate substitute remedy. I would add that, under this court's cases, a
legislatively imposed limit on the damages that an injured patient may recover against
OHSU and its employees would not violate the Remedy Clause as long as that limit does
not deprive the patient of a "substantial" remedy. Those cases also demonstrate that the
majority's decision does not threaten existing statutes in which the legislature has altered
or eliminated common-law causes of action, such as the workers' compensation system.

The insurance obtained by individuals for claims arising from their driving
and homeownership -- and by doctors for malpractice claims -- does not necessarily
determine the limits of liability that the legislature should set for purposes of the Oregon
Tort Claims Act, let alone the level that is required by the Remedy Clause. At the very
least, however, the decisions of private individuals and institutions regarding their
insurance coverage provide some indication of the kinds of claims those private actors
ordinarily face and, indirectly, of what kind of remedy for those claims likely would be
"substantial" or "adequate" for purposes of the Remedy Clause. In any event, the fact that
virtually every Oregon doctor carries malpractice insurance that far exceeds the caps
applicable to OHSU and its employees suggests that those limits need to be changed. In
my view, the legislature should, at least for medical malpractice claims, increase the
existing claims limit substantially and immediately and, perhaps, retroactively.

My second point relates to the standards by which this court reviews
legislative modifications of common-law causes of action to determine whether they are
consistent with the Remedy Clause. This court's Remedy Clause cases allow the
legislature to adjust Oregon law to changing circumstances by creating, eliminating, or
altering causes of action or providing defenses or immunities to the cause of action;
however, if those changes eliminate a common-law remedy that existed in 1857, the
legislature must provide an adequate substitute remedy. See Smothers v. Gresham
Transfer, Inc., 332 Or 83, 124, 23 P3d 333 (2001). The majority recognizes that
flexibility: "[T]the legislature is authorized, under Article I, section 10, to vary or modify
the nature, the form or the amount of recovery for a common-law remedy," as long as an
injured person has an adequate substitute remedy. ___Or at ___ (slip op at 34); see also
___Or at ___ (slip op at 30) (Remedy Clause "does not eliminate the power of the
legislature to vary and modify both the form and the measure of recovery for an injury, as
long as it does not leave the injured party with an 'emasculated' version of the remedy that
was available at common-law.").

The difficulty, of course, in this as in other Remedy Clause cases, is
determining whether a substituted remedy is constitutionally adequate. This court has not
articulated a precise test, and it probably is not possible to do so. As the majority notes,
we have used different words to try to identify what kind of remedy is required. Many
cases simply have held that the legislature may not leave a plaintiff "without remedy,"
Mattson v. Astoria, 39 Or 577, 579, 65 P 1066 (1901), or with only an "emasculated"
remedy. West v. Jaloff, 113 Or 184, 195, 232 P 642 (1925). In Hale v. Port of Portland,
308 Or 508, 523, 783 P2d 506 (1989), the court reviewed the earlier Remedy Clause
decisions and stated that the Remedy Clause "is not violated when the legislature alters
(or even abolishes) a cause of action, so long as the injured party is not left entirely
without a remedy. Under those cases, the remedy need not be precisely of the same type
or extent; it is enough that the remedy is a substantial one." (Emphasis added.) In Hale,
this court upheld a cap on damages that the legislature had enacted as part of an
expansion of the class of plaintiffs who could sue a public body: "A benefit has been
conferred, but a counterbalancing burden has been imposed. This may work to the
disadvantage of some, while it will work to the advantage of others." Id.

No Oregon case supports plaintiff's position that any tort claims limit would
be unconstitutional when applied to a plaintiff whose damages exceeded that limit. Hale
is almost directly on point. There, this court upheld a tort claims damage limits of
$100,000 on a claim against the City of Portland, even though (1) the plaintiff's alleged
economic damages exceeded $600,000, and (2) at common law, the plaintiff would have
had a claim against the city for an unlimited amount (because the claim was against the
city acting in a proprietary capacity). This court rejected the plaintiff's argument that the
$100,000 limit on damages that could be recovered against the city violated the remedy
clause because the plaintiff's damages exceeded that amount. As this court concluded in
upholding the cap, although "a limit has been placed on the size of the award that may be
recovered," all persons "who had a remedy continue to have one." Hale, 308 Or at 523.
More relevant to this case, the court in Hale recognized that when the legislature modifies
a common-law claim, that change may "work to the disadvantage of some, while it will
work to the advantage of others." Id.

Greist v. Phillips, 322 Or 281, 906 P2d 789 (1995), also rejected the
argument that plaintiff makes here. In that wrongful death case, a jury had awarded the
plaintiff noneconomic damages of $1.5 million, but the trial court had reduced the award
to $500,000 pursuant to former ORS 18.560(1) renumbered as ORS 31.710 (2003). The
plaintiff in Greist made the same argument that plaintiff makes here: that the cap "wholly
denies a remedy for legitimate losses that exceed $500,000." Greist, 322 Or at 290
(quoting the plaintiff's brief). This court, however, concluded that plaintiff's recovery of
$500,000 in noneconomic damages, in addition to $100,000 in economic damages, was a
"substantial remedy," even though it was a fraction of the amount that the jury had
awarded.

The majority distinguishes Hale and Greist from this case on grounds that I
find persuasive. However, nothing in the majority opinion undermines the holdings in
those cases that the Remedy Clause does not prohibit the legislature from imposing caps
on tort damages as long as those caps do not deprive a plaintiff of a "substantial remedy."
Hale and Greist both hold that the legislature may act with regard to classes of claims or
plaintiffs and that a statutory limit on certain kinds of claims does not violate the remedy
clause, even though it may limit the damages that can be recovered by a particular
plaintiff for a particular claim. In my view, the problem with the statutory scheme at
issue in this case is not the fact that OHSU's liability is capped, but rather that a cap of
$100,000 for economic damages and $100,000 for noneconomic damages is not a
substantial remedy for medical malpractice claims.

To summarize, Article I, section 10, does not "freeze in place common-law
causes of action that existed when the drafters wrote the Oregon Constitution in 1857."
Smothers, 332 Or at 124. Rather, the legislature may modify those remedies by changing
the nature of the plaintiff's claim, the available defenses, or the amount of damages that
the plaintiff may recover, as long as the plaintiff retains a substantial remedy "for injury
done him in his person, property, or reputation." Here, the modification made by the
legislature -- the elimination of the claims against the individual defendants and the
substitution of OHSU as the only defendant, with the caps on OHSU's liability described
above -- did not leave plaintiff with a substantial remedy for his malpractice claim.

That understanding of the issue in this case also demonstrates that nothing
in the majority's opinion undermines other statutes in which the legislature has adjusted
common law rights and liabilities. The most obvious example is the workers'
compensation system. In Smothers, this court stated that the court's earlier decisions
"implicitly * * * recognized the legislature's constitutional authority to substitute workers'
compensation for the common-law negligence cause of action for work-related injuries."
332 Or at 125. The workers' compensation scheme provides an injured worker with
compensation for work-related injuries without the necessity of proving the employer's
negligence; however, the amounts that a particular injured worker may receive may well
be less than he or she could recover in a successful negligence action against the
employer. In a sense, an injured worker's damages are capped at the level of benefits that
the worker receives under the workers' compensation program. However, because of the
trade off of not having to prove the employer's negligence (and other procedural
advantages) and because injured workers' benefits are related to the severity of the injury,
the workers' compensation scheme provides workers generally with a "substantial
remedy" for remedy clause purposes.

In other statutes, the legislature has determined that important public
policies will be advanced by encouraging certain activities and has modified common-law
causes of action involving those who participate in such activities. "Good Samaritan"
statutes limit the circumstances in which a person injured by another person who provides
emergency medical assistance, transportation, or defibrillator treatment can recover
damages. See ORS 30.800; ORS 30.807; ORS 30.802. Other statutes provide individuals
with limited immunity for reporting child abuse, ORS 419B.025, and for disclosing
information about a former employee to a new employer. ORS 30.178. In those and
similar statutes, the legislature has modified the plaintiff's common-law cause of action
by, for example, requiring the plaintiff to prove "gross negligence" rather than
"negligence," or by providing limited immunity to defendants for some kinds of conduct.
The majority's decision, like this court's earlier Remedy Clause cases, allows the
legislature to respond to what it perceives to be important public policy needs, as long as
it does not eliminate a common-law cause of action without providing an adequate
substitute remedy.

Kistler, J., joins in this concurring opinion.

1. ORCP 21 B states: "After the pleadings are closed, but within such time as not to delay
the trial, any party may move for judgment on the pleadings."

6. Other public bodies, such as municipal corporations, enjoyed immunity from suit only
when engaged in "governmental" functions, but not when engaged in "proprietary" functions.
Hale, 308 Or at 518. The distinction between governmental and proprietary functions, however,
is not entirely clear from our previous cases. See id. at 518-19) (noting this court's inconsistent
conclusions concerning whether street maintenance, for example, was governmental or
proprietary). Because we conclude that OHSU is an instrumentality of the state, we do not
address whether OHSU was engaged in a governmental or proprietary function when it treated
plaintiff.

7. We note that this court recently concluded that SAIF was not an arm of the state for
purposes of Eleventh Amendment immunity.
Johnson v. SAIF, 343 Or 139, 156, 164 P3d 278
(2007). As we noted in that case, however, the test for Eleventh Amendment immunity is
different than the analysis required to determine whether an entity is an "instrumentality" of the
state for state immunity purposes. Id. at 147-48, 151 (outlining factors of Eleventh Amendment
analysis).

9. We briefly address plaintiff's argument that the damages limitation of the OTCA violates
his right to a jury trial under Article I, section 17. Article I, section 17, is not the source of any
substantive claim or theory of recovery. Jensen, 332 Or at 422. Instead, as this court
summarized in Lakin v. Senco Products, Inc., 329 Or 62, 82, 987 P2d 463 (1999), Article I,
section 17, "guarantees a jury trial in civil actions for which the common law provided a jury trial
when the Oregon Constitution was adopted in 1857 * * *." See also Jensen, 334 Or at 422
(quoting same). Here, we have concluded that plaintiff would not have had a civil action against
OHSU under the common law. Therefore, the OTCA's damages cap as against OHSU does not
violate plaintiff's right to a jury trial under Article I, section 17.

10. Defendants' contention that the "remedy" guaranteed by Article I, section 10, refers only
to the process of administering justice, and not to the substance of the remedy afforded, is
contradicted by our decision in Smothers, 332 Or at 124, as we noted earlier: "The word 'remedy'
refers both to a remedial process for seeking redress for injury and to what is required to restore a
right that has been injured."

12. In Storm v. McClung, 334 Or 210, 222-23, 47 P3d 476 (2002), this court disavowed
Neher, to the extent that it concluded that ORS 30.265(3)(a) violated Article I, section 10,
because, contrary to the holding in Neher, Article I, section 10, affords protection only to injuries
for which a cause of action existed in 1857.

13. ORS 18.560 placed a limitation on noneconomic damage awards of $500,000 in all civil
actions except for those brought pursuant to the Oregon Tort Claims Act and the Oregon
Workers' Compensation Act. Greist, 322 Or at 284 n 1. That statute was later held
unconstitutional under Article I, section 17, in Lakin, 329 Or at 82.

14. Greist assumed that the Remedy Clause applied to a statutory wrongful death action. We
note that, in accordance with our decision in Storm, 334 Or at 222-23, limits on legislatively
created causes of action are not subject to Article I, section 10.

15. Smothers's use of the phrase "emasculated remedy" has its origins in this court's decision
in West. Smothers, 332 Or at 119-20. In West, 113 Or at 195, this court held that ambulance
drivers would remain liable for negligently inflicted injuries, despite a statute that could have
been construed to limit such liability, because such a construction took away "from an injured
person a good common-law remedy for a private injury committed by a private citizen and gives
him an emasculated remedy wholly inadequate under many conditions." (Emphasis added.) The
court also explained that such a remedy "could not be taken away without providing some other
efficient remedy in its place." Id. (emphasis added). West, however, did not involve -- and
therefore did not provide -- an analysis of a statutory limitation on recoverable damages.

17. ORS 30.270(1)(b) states that damages recoverable against a public body shall not exceed:

"$100,000 to any claimant as general and special damages for all other
claims arising out of a single accident or occurrence unless those damages exceed
$100,000, in which case the claimant may recover additional special damages, but
in no event shall the total award of special damages exceed $100,000."

General damages, as noted above, now are described as noneconomic damages
and encompass nonmonetary losses, including damages for pain and suffering, emotional
distress, injury to reputation, and loss of companionship. See, e.g., ORS 31.710(2)(b) (defining
noneconomic damages in the context of a statute limiting recovery for noneconomic damages in
civil cases). Special damages now are described as economic damages and refer to the verifiable
out-of-pocket losses, including medical expenses, loss of income and future impairment of
earning capacity, and costs to repair damaged property. See, e.g., ORS 31.710(2)(a) (defining
economic damages).

18. We note, however, that OHSU health care professionals who provide patient care outside
of the OHSU system, pursuant to a private relationship between the patient and the professional,
are not protected by the OTCA. See ORS 30.268(2) (noting that "services constituting patient
care that are provided at a location other than the [OHSU campus or clinics] are not within the
scope of state employment or duties" when those services are provided pursuant to "an
exclusively private relationship").

19. Because we have concluded that the OTCA, in this case, violates Article I, section 10,
we need not address plaintiff's argument that the damages limitation of the OTCA violates his
right to a jury trial under Article I, section 17.

20. According to one comprehensive survey, for 2003, 34.9 percent of Oregon
doctors had malpractice insurance with a per occurrence limit of $1 million (a decline
from 45 percent in 1996), while 26.8 percent had a per occurrence limit of $5 million (up
from 22.2 percent in 1996). Oregon Professional Panel for Analysis of Medical
Professional Liability Insurance, A Report on Factors Impacting Medical Malpractice
Insurance Availability and Affordability p 65 (2004).

21. Plaintiff's challenge to the existing tort claims limit -- or to any such limit -- necessarily
would be an "as applied" challenge available only to plaintiff (or a similarly situated plaintiff)
whose damages actually exceeded the limit. In
Jensen v. Whitlow, 334 Or 412, 51 P3d 599
(2002), this court rejected a facial challenge to the tort claims act limit. Plaintiff does not ask us
to overrule Jensen, and the majority does not do so.